Lockheed Invests in Ground Combat Vehicles

By Allyson Versprille
With a full production run of the expensive F-35 joint strike fighter becoming less likely, Lockheed Martin is diversifying its portfolio and looking for future sources of revenue in new markets such as ground vehicles, said one analyst. 

The company is currently competing for the Marine Corps’ amphibious combat vehicle 1.1 program, which is meant to replace the service’s aging amphibious assault vehicles that entered into service in the 1970s. There are five entrants for ACV 1.1 — Lockheed, BAE Systems, General Dynamics, Science Applications International Corp. and Advanced Defense Vehicle Systems.

James Hasik, a senior fellow for defense at the Atlantic Council’s Brent Scowcroft Center on International Security, said Lockheed has been involved in the Marine Corps’ effort to replace its AAVs for years. However, its recent decision to split with Finnish company Patria and compete for the amphibious combat vehicle on its own probably stems from uncertainty regarding the joint strike fighter program.

“There is nagging concern — and there should well be — that the joint strike fighter program is never going to amount to the full run of aircraft that the U.S. still claims it wants to buy, and yet, Lockheed Martin’s share price depends pretty strongly on something close to a full run of the F-35,” he said. “The airplane is very expensive and it is yet unclear if the price is going to come further down.” Maintenance costs are believed to be about 50 percent higher than those of an F-18, he added.

Ground vehicle programs like the ACV and the joint light tactical vehicle — which the company lost in August to Oshkosh Defense — could play a role in a strategy to backfill revenue in the case of lower than projected F-35 purchases, Hasik said. Lockheed is currently protesting the JLTV decision.

The company’s partnership with Patria dates back to 2007 when they teamed up for the Marine personnel carrier program — an earlier effort to replace the service’s amphibious assault vehicles. In 2012, Lockheed won a contract to test and validate its offering, the Havoc 8x8 armored modular vehicle, an evolution of a Patria platform. Originally it was expected that Lockheed’s Havoc would be the company’s entry for ACV 1.1, however, prior to its proposal submission in May the team split.

Scott Greene, vice president of ground vehicles at Lockheed Martin Missiles and Fire Control, said the decision to part with the Finnish manufacturer “was a mutual decision between Lockheed Martin and Patria to terminate the agreement due to our strategic objectives” that diverged over time.

Lockheed unveiled its new candidate for the program at the Modern Day Marine trade show in September. The company is the original equipment manufacturer, systems integrator, and final-assembly, integration and test agent for the vehicle.

Hasik said if Lockheed wins the ACV contract as a solo act it would prove that the company can hack it as a ground vehicle manufacturer. “If you want to [compete] in a way that would dispel any questions about whether or not you are a ground vehicle manufacturer, you take it on yourself and say, ‘If we win this one, we’ve won big.’”

The ACV program is more manageable for the contractor than JLTV, according to Hasik. Based on accounts from those involved in the JLTV program, it is likely that the company lost because it was the only contractor that had not demonstrated the ability to build tens of thousands of trucks on a production line; not because of the technical merit or the design of its vehicle, Hasik said. The Marine Corps program entails a rate of production more similar to that required for aircraft, he noted. The service plans to buy 202 ACV 1.1 vehicles.

For the amphibious combat vehicle program, Lockheed looked for partners and suppliers with existing or partially existing technologies that would meet the Marine Corps needs, Greene said. Three key companies are Merrill Industries, which fabricated the hull structure; Hortsman, which developed the suspension system; and Caterpillar, which supplied its 711-horsepower C13 engine.

The Marine Corps plans on awarding two bidders engineering and manufacturing development contracts for ACV 1.1 at the end of November. Both contractors will build 16 vehicles and the two offerings will be tested over a period of 24 to 30 months, according to Manny Pacheco, a spokesman for the Marine Corps’ program executive office for land systems.

Topics: Combat Vehicles

Comments (0)

Retype the CAPTCHA code from the image
Change the CAPTCHA codeSpeak the CAPTCHA code
Please enter the text displayed in the image.